Discover shares hit

SHARES in Europe's largest caravan retailer Discover Leisure slumped after bosses admitted that bad weather and the early Easter holiday had hit sales. The company - which sells caravans, motorhomes and accessories such as awnings, tents and outdoor clothes - saw the value of its shares fall by 16 per cent to 7.125p.

SHARES in Europe's largest caravan retailer Discover Leisure slumped after bosses admitted that bad weather and the early Easter holiday had hit sales.

The company - which sells caravans, motorhomes and accessories such as awnings, tents and outdoor clothes - saw the value of its shares fall by 16 per cent to 7.125p.

It announced a pre-tax loss of £1.8m for the six months to March 2 - up from £800,000 last year - despite the fact that turnover has increased by 412 per cent to £51.8m.

Discover Leisure operates from headquarters at Coppull, near Wigan, as well as 15 other locations in England and Wales.

Chief executive Trevor Parker said that sales for May had picked up 'considerably' and predicted that profits will top £2m despite the shaky start.

He blamed poor weather and the early Easter as factors for the poor trading figures in March and April.

"Business is very seasonal and the results are in line with our expectations," he said.

"Our profits were £400,000 last year and this year I believe we are on course to achieve £2m - and that's a good result in the face of the credit crunch.

"Over the past year, we've rebranded to Discover Leisure and the new website, which was established two months ago, is now on target to complete £1m of trade in its first year.

"I think that there's still more work to be done within the UK before we branch overseas and there remains certain geographical areas within the UK - such as East Anglia - where we do not currently have a presence. As the economic situation bites, we shall be looking at the possibility of picking up some more competitively priced sites."

City analyst Charles Hall of Panmure Gordon set a 9p share price target and downgraded his profit forecasts.

He said:"We are reducing our profit before tax forecast for the year to August 2008 from £3.5m to £2m, as unit volumes are behind expectations.

"This reduces our earnings per share forecast from 1.5p to 0.9p."

AIM-listed Discover Leisure was founded as a cash shell called Titan Move by Manchester financier Ian Currie's Zeus Group and, in August 2005, it bought the company which owned Cheshire firm Harringtons Caravans .

Last year, the group paid £20m for Lancashire firm Barrons and just over £2m for Mendip, a smaller operator based in Somerset. The group employs 600 staff.